Justice D P Wadhwa Committee in its report submitted to the Supreme Court on March 25, says that “PDS is inefficient and corrupt. There is an unholy nexus between the transporters, fair price shop owners and officials of the department of food and civil supply.”

A news report from news webindia 123 dated September 30, 2008 says “The Docks Intelligence Unit (DIU),attached to Custom House, seized 1,684 bags of rice, attempted to be smuggled to Singapore from Chennai Port in the guise of exporting sugar”

Now The Times of India, Chennai Edition (page 4) dated March 26 reports that smuggling of rice through the Chennai port has gone up.

News report is given below:

Chennai: Smuggling of rice through the Chennai port has gone up, reportedly fuelled by the increasing demand for local varieties in East Asian countries. Sleuths of the Directorate of Revenue Intelligence (DRI) arrested an exporter on Wednesday on charges of rice smuggling. Another person had been nabbed two weeks ago. Recently, 28.5 tonnes of several rice varieties were seized at the port.

The two arrested persons told DRI officials they had already exported 1,193 tonnes to Malaysia, Singapore, New Zealand and Indonesia.
“One of the exporters smuggled 1,043 tonnes of rice and the second person 150 tonnes. The varieties included Ponni (both boiled and raw), par-boiled, Jeera Samba, white and red rice. They pick up a huge margin on selling these varieties as the prices have gone up in these countries,” a DRI official told The Times Of India.

The arrested, who confessed to having smuggled rice to several foreign countries over the last four years, have been operating through Chennai-based export firms. One of them also smuggled rice through a Mumbai-based firm, sources said.
Officials said these countries have a huge population of Indians and since the Indian government had banned the export of rice (except Basmati) to safeguard local supplies and to cut food price rise, the availability of rice in these countries was affected and the prices had soared.

“Now, Indian varieties are priced between Rs 120 and Rs 150 a kg in these countries. Unscrupulous exporters procure rice at 25-35 per kg here and send it across. There is a lot of money involved. There is a regular outflow of processed food items through the Chennai port with each container having 100-150 packages. Rice is concealed and smuggled out,” an official added.

He said the names of the arrested were withheld as investigation was progressing. “We are trying to break the network, as rice-smuggling is rampant in several parts of the country. We do not want to alert other smugglers now by exposing the accused.”
The accused will be booked under the Customs Act and also under Sections of the Essential Commodities Act, the officials added.

Officials said large-scale smuggling would defeat the purpose of the ban on rice export and would further inflate prices.
“Large-scale smuggling will also affect availability. If the smugglers offer a price higher than the market rate, rice dealers will also try to sell the maximum to these unscrupulous exporters,” another official added.